# calculating variance analyses for direct materials and labor

Calculating Variance Analyses for Direct Materials and Labor
The Hockey Helmet Company expects increased demand for its hockey helmets at the beginning of hockey season in September.
Here is the projected data for September:

The Hockey Company
Variable Costs Total
Fixed Costs Total

Raw materials
\$ 325,000

Direct manufacturing labor
\$ 170,000

Indirect manufacturing labor

\$ 22,500

Factory Insurance & Utilities

\$ 34,000

Depreciation ? Machinery and factory

\$ 18,500

Repairs and maintenance ? factory

\$ 17,000

Distribution expenses
\$ 20,000
\$ 40,000

General and administrative expenses

\$ 30,000

Variable Cost and Volume Data

Raw materials = 3.25 lbs. x \$10.00/lb.
\$ 32.50

Direct Labor = 1.7 hr. x \$10/hr.
\$ 17.00

Volume in units
10,000

Sales price per helmet is \$90.
Required elements:
In good form in Microsoft Excel perform the following tasks:

Prepare the static budget operating income in contribution format.
If sales demand increases to 11,500 units for September, prepare the flexible budget for September in contribution format to reflect the new data.
Compute and reconcile the sales volume variance, indicating whether the variance is favorable or unfavorable.
Given the following additional actual data:

Total Direct Costs Incurred for September

Raw Materials =35,100 lbs. used
\$ 351,000

Direct Labor =18,360 hrs. incurred
\$ 183,600

Volume in units
10,800

Using the three-prong method to present your calculations, compute the direct materials price variance, the direct materials efficiency variance, the labor price variance, and the labor efficiency variance, indicating whether these are favorable or unfavorable.
Below each variance calculation neatly provide one possible explanation for each of the variances.

Submit your responses in an Excel spreadsheet, neatly organized.

Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount! Use Discount Code “Newclient” for a 15% Discount!NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.

The post calculating variance analyses for direct materials and labor appeared first on Superb Professors.